Top 10 KPIs every business should track

Summary: You cannot always rely on intuition while making essential business decisions. A better idea would be to supplement your multiple years of market experience with concrete data that will help you make the right decisions. As a result, you should implement advanced ERP software that tracks all business KPIs and helps prepare easy-to-understand reports. This blog will explain the top 10 KPIs you should monitor and track to help you grow faster, compete better, and understand changing market realities and customer preferences.

Here are the top 10 business KPIs every business should track:

1. Number of Sales

The number of products you sell each month contributes to your company’s profits. This figure tells how well your business is performing and helps identify loopholes. For example, you can determine what products your customers are most likely to buy by tracking your sales. Based on that, you can make better investment decisions by purchasing essential raw materials and setting up necessary processes.

The following parameters will help you measure the sales revenue:

• The monthly sales you are making.
• The percentage increase in monthly sales.
• Increase in product sales to new customers.

2. Annual Sales growth

Calculating weekly/fortnightly/monthly sales is crucial for getting a comprehensive picture of the company’s growth. But there is no better statistic than annual sales growth to determine the overall performance of your company. 

Generally, a company’s sales graph changes with the change in seasons. For example, umbrellas sell the most during the monsoon. Similarly, consumers buy woolen clothes the most in the winter season. Therefore, by tracking annual sales growth, businesses can differentiate between months that contributed maximum revenue and those that didn’t show much action.

The best way to compare annual sales growth is by comparing the current sales period with the previous one. This exercise will give you a detailed view of how your sales are growing YOY.

3. Number of Complaints filed by Consumers

You might have heard/read the following quote quite often: “Customer is the king.”

And if you want to make them feel like a king, you must ensure the best customer service. By providing top-notch customer service, you can build a robust and long-lasting customer relationship that will encourage your customers to subscribe to your services and purchase your products. 

Customer Relationship Management (CRM) software is a crucial business management solution that will help you form a repository of customer queries. The best part is that this software provides instant replies to such queries that help increase customer loyalty.

With this software, you can track:

• Number of customer queries registered per month
• Number of customer queries resolved per month

4. Accounts Payable Rate

Vendors, suppliers, and distributors play a pivotal role in running any industry smoothly. Therefore, you should record the money you spend on them to check whether they provide you with the required market penetration. The Accounts Payable Rate allows you to check how many transactions you have made in a particular period and how much you have paid your manufacturers, distribution agents, retailers, trade show reps, and many more.

5. Inventory management

Businesses can get a real-time status of the goods bought and sold by checking the inventory. You can also monitor which products are selling fast and which ones show a massive drop in sales.

Enterprise Resource Planning (ERP) software will enable you to:

• Track real-time inventory status
• Automatically place raw material purchase order if the inventory falls below the set threshold
• Check for seasonal discounts
• Create and update the list of vendors who sell raw materials at a lower industry rate
• Stack products that customers are most likely to buy 
• Calculate liquidity ratio, stock to sales ratio, and many more

6. Market share

Your company’s market share is a mark of your success because the more market share you have, the bigger your revenue is. However, you can also determine your position in the industry by analyzing how ahead/behind you are to your competitors. And while making the comparison, you can also brainstorm an effective strategy to boost your performance. 

Market share KPIs include:

• Your sales percentage share in the market as compared to your competitors.
• Quantity of products sold in a particular period against your competitors.

7. Online Traffic

Today, businesses need to reach audiences living in every nook and corner of the planet. Fortunately, online mediums, including social media apps and the internet in general, provide the necessary infrastructure for companies to expand their business. 

Through online platforms, you can communicate with customers daily. Also, you can receive feedback that allows you to check how customers perceive your products. Moreover, you can resolve customer queries quickly and build robust and long-lasting relationships with them. 

Track the following parameters for measuring online traffic:

• Post engagements on social media apps.
• The number of weekly/monthly/annual visitors on your website 

8. Profit and loss

 A business either makes a loss of a profit. There’s no middle ground. So you must ensure that you fall in the latter category. It requires brainstorming appropriate business strategies, understanding changing market conditions and customer preferences, and a keen eye to differentiate between profitable activities from loss-making ones. 

Critically analyze where you are spending money and review your transactions. Then, prepare a detailed sheet that will help you check whether your ROI is more than the initial investment. You can also identify roadblocks that are harming your company’s finances.

The KPIs to look out for are:

• Monthly/quarterly/half-yearly/annual profits
• Cost for running your business
• The profit/loss your company is making/incurring after ruling out the expenses.

9. Revenue growth rate

Each business creates a roadmap of objectives/goals to be achieved within a predefined deadline. A company’s revenue at the end of a financial year depends on how fast it achieves these goals. The revenue growth rate is an essential statistic that allows companies to evaluate how fast they have grown in a particular period. It’s measured based on several parameters like sales, income, gross margin, and profit. The benefit of calculating revenue growth rate is to determine whether the company’s overall performance has increased or decreased over a particular period. 

The KPIs for calculating revenue growth rate are:

• Quarterly net profit 
• Sales made over a particular period

10. Customer satisfaction

Providing the best customer service is the need of the hour. Remember that if your customers aren’t satisfied, they won’t hesitate to shift their loyalty to your competitors. 

Fortunately, you can track customer satisfaction quickly and efficiently with advanced systems like CRM software. Also, tons of online applications help calculate customer feedback, reviews, and develop a cordial relationship with them. 

The essential KPIs include:

• Employee response time
• Time taken to solve customer query
• Customer satisfaction score
• The UI/UX of your mobile app and website 

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.